Atlanta hotel occupancy, rates show increase - Atlanta Journal Constitution
The Atlanta Journal-Constitution
Atlanta's hotel industry is slowly rebounding from the doldrums of 2009, when it hit occupancy bottom and restraints were put on new lodging construction.
After averaging 52.6-percent occupancy two years ago, local hotels are expected to fill 59.8 percent of their rooms by the end of this year, according to PKF Hospitality Research, which tracks the industry. That number is expected to increase to 61.9 percent next year.
Guiding the upswing, business and leisure visitors are traveling again. New rooms dropped significantly over the past few years as builders found it difficult to get lending for construction. Stabilizing supply growth helped reduce the imbalance with demand.
The improvements are good news for the industry, which saw an occupancy decline in 2006, the same time high-end hotels such as St. Regis, Palomar (now Renaissance) and Rosewood were in development. By 2009, when hundreds of rooms were added to the market, occupancy had dropped 10.2 percent.
Hotel health is important to metro Atlanta's $11 billion hospitality industry. The area's 93,000-plus rooms have helped Atlanta win big conventions, sporting events and business relocations. Thousands of residents are employed in the industry.
PKF will discuss the industry's health and unveil its forecast for next year and beyond on Wednesday at the InterContinental Hotel in Buckhead. In addition to improved occupancy, the research group will show increased room rates -- up 1.5 percent this year and predicted to rise 5.1 percent next year -- as well as upbeat numbers on revenue per available room, or RevPAR.
In a recent video conference regarding the national hospitality outlook, PKF President Mark Woodworth said the rebound in industry comes with caveats, especially room rates. The rates have returned to pre-recession times.
"In real terms room rates are finally back to zero," he said. "We haven't seen any real growth."
Jack Corgel, Robert C.Baker chair professor of real estate at Cornell University, said the industry should continue growing in the years ahead, despite a weak economy, political instability, uncertainty over European debt and 9-percent unemployment. Joblessness, in particular, has been overemphasized in future growth models.
"The unemployment story is unfortunately very much overweighted in the lower end of the income spectrum and in certain occupations," he said.
Corgel argued that personal income for those who are working is slowly increasing and that business travel, which fills rooms during the week, has resumed.
"Hotels are probably going to be better than the economy, especially as measured by GDP," he said.
Atlanta hotel statistics and forecasts (2006-2012)
Year: occupancy, occupancy change; average daily rate, ADR change; revenue per available room, RevPAR change
2006: 64.3 percent, -0.5 percent; $86.88, 9.3 percent; $55.91, 8.8 percent
2007: 62.8 percent, -2.4 percent; $91.42, 5.2 percent; $57.44, 2.7 percent
2008: 58.6 percent, -6.7 percent; $92.05, 0.7 percent; $53.95, -6.1 percent
2009: 52.6 percent, -10.2 percent; $83.83, -8.9 percent; $44.10, -18.2 percent
2010: 57.6 percent, 9.5 percent; $83.02, -1.0 percent; $47.84, 8.5 percent
2011 (forecast): 59.8 percent, 3.8 percent; $84.30, 1.5 percent; $50.41, 5.4 percent
2012 (forecast): 61.9 percent, 3.5 percent; $88.58, 5.1 percent; $54.82, 8.8 percent
Source: PKF Hospitality Research, Smith Travel Research
06 Sep, 2011--
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